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Context

  • Self-employed
  • Bought health insurance through a health insurance marketplace
  • All premiums for the entire year were "specified" (nothing "unspecified")
  • Need to calculate the the amount of health insurance that can be deducted on line 29 of the 1040.

Problem

IRS publication 974 states that you can use either the iterative calculation method or the simplified calculation method to determine the SE health insurance deduction. AFTER you've spent time trying the iterative method, THEN the instructions state that if you keep getting a result of $1.00 or more, then don't use the iterative method. (See the caution on p. 60 of the 2016 instructions. As of late December 2017, Publication 974 for 2016 is applicable for 2017; there is nothing newer.)

Is there an "up front" way to decide that the iterative method is NOT suitable? (I.e., if your situation is X, then don't bother with the iterative method?)

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